China on the verge of recession?

Not this year but possibly the next. None believes the official GDP growth numbers from the Chinese government. Throw in a power struggle and that electricity consumption had a startling drop in April and many are on edge about their investments in this country.

Count Jim Jubak and I among those bearish. He's got a good article up today about why China could be headed for more than just a hiccup in it's economy. I think the real estate bubble in Shanghai and the smaller cities could tip the scale.

In a market that is hard to get reliable stats for, I would try to focus on power consumption and non-performing loans numbers to try to predict where this market is headed.

BRICs still not cheap enough yet?

Troubling signs of slow growth in India and a weak rule of law in Russia contribute to the fact that the BRICs still might not be low enough for the cautious investor. The BRIC Bear Market still has a ways to go. Throw in the uncertainty with the ruling Communist Party in China surrounding Bo Xilai and the subsequent power struggle, and we may have a ways to go before things stabilize. Plummeting housing prices are sparking fears of the housing bubble bursting in cities all across the Middle Kingdom as well.

China and Corruption

The power struggle ensuing behind closed doors is becoming more and more public knowledge as information about Bo Xilai trickles out. There is a good editorial at the Post about how it might effect our future, and why we must tread lightly when investing in China for the future. Rampant corruption in China threatens the entire fabric of their government -led economy.

Bo Xilai Scandal

The bizarre events surrounding Bo Xilai just got stranger. His wife is being investigated for murder of a British national. I would exercise caution when investing in China. The government is shrouded in mystery, and we must rely mainly on foreign news media to try to get a glimpse of what goes on behind the red curtains. The Times article hints that the Party could be involved in his death, but now they need to frame the wife. Bo Xilai has already fallen, so his spouse would make an easy target.

Another Chinese Politician Disappears

Where is Bo Xilai? The former mayor of Dalian is still missing, and the Chinese government is shutting down websites in hopes of quelling internet unrest about it. These kind of reports make me wonder how long a society like what China has set up can last. Too many people eventually will start asking too many questions, so many that it will go beyond what the communist government can contain.

China decision affects gas prices

More on rare earths. The shortage is actually increasing the cost of gas indirectly.

China reduces rare earth exports

Most of the minerals used in high tech devices come from China. Now the export of these valuable minerals is being limited. Check around, there are only a few companies outside of China into rare earth mining. Might be something to look into.

Tension on the Korean Peninsula

China and Russia are strongly opposed to South Korea's planned live fire exercise set to take place by Tuesday. Live fire drills conducted by the South a few weeks ago are what set off the initial artillery shelling by the North.

Inflation hits China hard.

Inflation is affecting the Chinese. I know Chinese graduates are heading to the big cities with high hopes, then having trouble finding jobs that pay even minimal wages. Something to keep an eye on in hopes of them avoiding civic unrest.

Asia Business Worries Over Swine Flu

Uncertainty abounds regarding outbreak of swine flu. We are still in the early stages but investors are nervous and eagerly awaiting to see how this all plays out.

Stay up to date on the investigation by the Center for Disease Control and Prevention (CDC).

Yuan Being Pushed

Keeping in line with the Chinese government pushing the yuan internationally recently, Argentina will be allowed to make orders from China in RMB and not the USD so commonly used. Countries short on dollars might find this particularly advantageous. The US government continues to hand out money at a staggering pace so we will see how this plays out.

China's Aircraft Carrier Plans

China has zero and the US has eleven, but China looking to build an aircraft carrier wouldn't exactly ease tensions over Taiwan. Hope you can find some holiday cheer somewhere else this week. Merry Christmas!

Cut Happy

China cut interest rates again, in wake of the record Fed cut. Hopefully this isn't another case of too little, too late. The Hang Seng was off more than 3 percent today.

Can we Party?

China's economy is slowing, see what the president of the country has to say about it. There's clearly more to it than just numbers, as he indicates steady growth must be maintained to limit social unrest.

Beijing Tea Party...

Came across a less than ringing endorsement of the interest rate cut in China. The tone of the NY Times article seems to question if the cut was even needed and would be effective. Scroll to the bottom where it was reported 2,000 people 'watched' another 500 ransack a factory they had just been fired from. Things seem a bit rougher there than what I had gathered from previous reports...

Watch this!

Jubak added CMED to his watch list. China Medical Technologies stands to gain from any stimulus the Chinese government might do to keep things moving in their economy. Note that he is just keeping an eye on it, he's been noting in his journal that keeping mostly in cash and waiting on the sidelines is most prudent at this juncture.

FXP for hungry China Bears.

Jim Jubak, a guy with a great track record over at MSN Money, has written about China and the risk involved. There is a Proshares offering, FXP, that tries to double short the FXI. Check the holdings of FXI so you know what you're getting into. If you're of the opinion that China's market will drop further, give FXP a look.

Will the drop in China ETFs last?

CNNMoney has an article about what may be in the works for Chinese ETFs. The article hints at the real extent of the damage the weather may have caused to the overall economy. There's also a bit of insight into how the Chinese and American economies are linked. The last sentence of the article in particular grabbed my attention. Nothing like corrupt governments to keep things interesting!